Best Time for Advisory Services to show Alpha :) & sell Services/Equity Related Products

Since Nifty topped at 9000 odd levels in March 2015 the Index has had a nice ride to 6850-7000 and is now back to 8500-8600.

The last move from 6900 to 8600 has been fast and furious with Midcap and Smallcap Indices hitting new all time highs or 3-5 year highs. Its obvious with such highs a lot of portfolios would now be making a lot of Alpha to the Nifty.

So now you will start noticing the following things.

1) Value Investment Advisors showing their 1 year/3 year performance returns. ( because just around 3 years back we were at 5500-5800 Nifty with USD-INR at 65-68)

This is what a Bull Market does or rather a new high in Smallcap and Midcap Index does. Everyone boasts about their calls – The most used words - Maine Bola tha.

Also the performance reports are a good way to sell your product whether it will work or not in the future.

So think hard before you go for anything as we don't believe the Bull Markets are ending. There will be more choices then ever.

Next 6 months may not be like the previous 6 months but next few years there will be a lot of opportunities.

How to go about your Investment Decisions and Spending your Money is your choice.?

All i can say is give it an equal amount of time as you do while buying a New Phone.

( Its a fact we spend more time selecting Phones/Laptops/Gadgets which are going to be worth 50-70% lower than on investment decisions like equities,gold,real estate, fds,ppf or trading decisions or trainings which can increase in value of yourself and your money)

YOU WILL BE SURPRISED TO KNOW - MOST OF THE ABOVE WORDS ARE FROM AN ARTICLE IN OCTOBER 2014 -

A constant learning through all these exercises is that Selection is very important in a Concentrated Portfolio but in a Diversified Portfolio the Asset Allocation and timing plays the real tool. Consider if you had a lot of cash to put in February 2016 and had removed only 15-20% cash in Jan-March 2015. It could do wonders to the net Returns.

In the debate of Concentrated and Diversified we forget the focus on Equity Allocation as part of Networth. ( You could be 5 % of your networth in Equities with a 3-5 Stock Portfolio and call yourself Concentrated. But does that change your networth )

In a good environment for Midcaps/Smallcaps all you need to do is ride and hope to get a few winners. Across portfolios we saw 2-5 stocks out of 25 making the big difference.

If you want to increase returns then look at increasing allocation by taking a few bets of 10-20% allocation and be convinced on your research and hope they work well.

It is easy to beat the Nifty by buying a portfolio of midcaps/smallcaps/microcaps in good environments. Most AMCs, PMS thats why use Nifty as a benchmark.

The Market is supreme and provides the returns to even Bad Processes in Good TImes. Be careful.

Conclusion

This is the best time for advisors to show their Performance. If you have got good returns then you might as well become an Investment Adviser 🙂 ( Pun Intended)

Sell Equity Related Products. ( You know there are some IFAs have more AUM then some small AMCs)

Use the best marketing and spamming techniques if you are in the business.

What are we Doing

No new schemes.

No New discounts.

Rejecting more clients with lower risk tolerance and much lower capital.

We had increased our prices in some schemes few months back.

No Marketing ( Coz we dont have a marketing team.)

Doing more training programs with Pay as Much as You want model to increase awareness.

Nooresh has written 2705 articles.

Very good observation Nooresh on all 5 random portfolios beating Nifty Smallcap Index. The reason could be out-performance of all Microcaps (Below BSE Smallcap Index).
You can also confirm it if you see BSE Advance Decline Line – Cumulative net advances starting from day 1.
Secondly, Another great observation “Selection is very important in a Concentrated Portfolio”. No doubt, selection is going to be biggest challenge now onward when everything may go up :-).